Saturday, 9 March 2013

Unintended consequences?

Richard Thaler points to a lovely piece of university regulation. We cannot afford such a regulation at the post-earthquake University of Canterbury, but it is beautiful.

Don't get Euro rule that bonus<salary. Won't it just raise salaries? Once worked at U that had rule alcohol<food at dinners-> more desserts!
— Richard H Thaler (@R_Thaler) March 6, 2013

Lots of universities get tetchy about alcohol being on dinner bills where staff are taking distinguished guests and speakers to dinner after an event. Some of it is puritanism, some of it is worries about how it looks, and some of it is pure misanthropy from university regulatory czars.

This rule consequently is a beautiful thing. It has all the appearance of working to constrain alcohol spending. But it encourages a move to a far better equilibrium: dinner with dessert and with wine, while still prohibiting really outrageous wine expenditures. If this were an intended consequence with a deliberately opaque regulation, would that academia had more administrators of this sort.